against banking assets the case will be different; besides the 5 per cent. guaranty fund which must be paid in, each bank is liable to be called on for an indefinite sum to make that fund good. Examined carefully in the clear light of figures and past facts, any fear which may arise on this score is plainly baseless; but it is to be regretted that the Canadian system was not followed in this respect, limiting the additional liability to a definite sum-in Canada one per cent. per annum of the amount of their circulation. A sentimental fear, though groundless, might act at the start as a deterrent in keeping out the very banks which from the prudence and conservatism of their management are the ones best qualified to issue notes.

Strong objection is raised to the plan of the Monetary Commission, even by advocates of the gold standard, on the ground that it is an inflation measure. Careful examination will not justify this contention. The highest conceivable addition to the circulation-assuming the capital of the banks to be unchanged-would be an amount equal to the difference between the present secured circulation-say 200 millions-and the capital less real estate investments-say 520 millions-or about 320 millions. But the tax of 6 per cent. on circulation in excess of 80 per cent. of the capital will entirely preclude the issue of such excess in normal times. Further there is specific provision for the immediate cancellation of U. S. notes and treasury notes, when redeemed, up to the amount of 50 millions; for the further cancellation from time to time of such notes, when paid, in amounts equal to the increase in national bank notes; and for the complete retirement and cancellation of all such notes within ten years after the passage of the act. Now assuming the possibility of a temporary inflation at the outset, we may look for a rise in prices accompanied by an increase of imports and a reduction in exports leading ultimately to gold shipments. But notes presented then for gold must be cancelled when redeemed, not held to be paid out again as now, thereby reducing, pro tanto, the amount of currency in excess.

A sudden inflation, too, can be brought about only by all the banks rushing in and taking out circulation to the full extent

allowed by law; but this is, in the nature of things, impossible. Timidity, and not rashness, is the general characteristic of banking methods, especially in the face of new and untried conditions. If there be any reason for apprehending that the banks would not all take out circulation under the plan, there can be no fear of undue inflation; the two are mutually exclusive.

There are three points to be covered by any financial legislation which aims to be sound and thorough; first, it must remove doubt as to the standard of value in the United States; second, it must ensure the absolute safety of the Treasury in the matter of its demand liabilities, and, third, it must provide a better bank note currency, the relative importance of these requisites being in the order stated.

As to the first, either of our two plans is adequate and ample. We should cease to be the only civilized nation on earth that clings in terms to what it has discarded in practice and pays for the privilege with impaired credit and ever recurrent spasms of financial distress. As to the second, the treasury is secured under either plan; but the Gage bill provides for the continued existence of the worst legacy of the civil war, the "greenback" debt, a legacy with which our fathers never intended to burden As to the third, the Gage bill errs on the side of conservatism and safety; the plan of the Monetary Commission goes much farther afield in the line of experiment, without abandoning, however, the solid basis of established practice and sound inference.

us.

Neither measure is likely to solve our financial questions perfectly and for all time; we have not reached the stage in our evolution when ideal measures can spring at once from human brains. Neither measure is likely to be passed in form; at this very writing comes the report of a third plan prepared by the Committee of the House on Banking and Currency. Possibly this last may be the best of the three; but if so, it will be because the others preceded it, in which case their work will have been done.

We have returned to our original proposition, to wit; that, however slow and disappointing the progress of currency reform may seem, a review of the advance already made

must be reassuring. The present din and uproar seems fatal to sober thought; we are berated for our sluggishness and hesitation about rushing into a senseless war by leaders many of whom would pay the cost of that war by "coining a vacuum" or issuing more greenbacks. If true patriotism consists in striving for our country's good, not in frothy and maudlin mouthings under the plea of suffering humanity abroad, to which at home we turn a deaf ear, the work of currency reform is no mean task for the patriot; and honest effort to that end has its reward.

Boston, April 10, 1898.

ALFRED L. RIPLEY.

THE CONCENTRATION OF INDUSTRY IN THE UNITED STATES.

TH

HE chief mission of the student of economic conditions is to investigate social changes that are taking place, and point out their influence upon the welfare of society. Among these changes there are certain movements which it is only possible to measure by the use of statistical methods. It is well known by economists that a profound transformation in the organization of industry is now taking place in all the leading manufacturing countries. The régime of household production has given place to the factory system. The individual teamster has been supplanted by the transportation companies. This transition has now advanced to the second stage, where the smaller enterprises are being eliminated, and the prosecution of industrial work concentrated in large establishments, and relatively fewer hands. In no country is this movement more pronounced than in the United States, and in no country can its course, untrammelled as it is by old customs and prejudices, be studied with better advantage. It is our purpose, therefore, as far as statistical material will permit, to show the character of recent changes in the organization of industry in this country, the extent to which they have already progressed, and, finally, to discuss some of the more important consequences that result from them.

In order to show the extent to which industry is being concentrated in fewer but larger establishments, it is desirable to have information showing, for as long a time as possible, the number of establishments in each industry, the number of employés in each establishment, and the value and quantity of the product of each. To fully bring out the significance of the movement it is necessary to know, not only the average size of all establishments, but the number of establishments of each size. The bare statement that the number of employés per establishment is a certain number, is of value, but it is more important to know the number of establishments

employing less than 10 hands, the number employing from 10 to 19, etc. Thus, for example, if there were five establishments employing two persons each, and one establishment employing 590, the average number of employés per concern would be 100, while in reality fifty-nine sixtieths of all employés are employed in establishments with 590 employés. Unfortunately the material collected in connection with the various censuses has not been presented in such a way as to enable us to obtain this information. We are therefore forced to content ourselves with information showing only the average importance of industrial enterprises. Though the information here afforded is thus not as complete as is desired, it is yet sufficiently full to show the general features of the movement we are considering.

A manufacturing establishment, according to the definition of the census, is any place in which products are manufactured during the year to the value of $500. The census figures, therefore, can fairly claim to include all work at all deserving of the term manufacturing. Owing to the fact that the changes in the methods of manufacture have necessitated changes in the classification of industries, it is not feasible to attempt to carry our inquiry back to the ninth census, 1870. In the following brief table is shown, for all manufacturing industries combined, the number of establishments, the number of employés and the value of their product, as reported at each census, 1870, 1880 and 1890, with a calculation of the average number of employés and value of product per establishment.

From this table it will be seen that, while the number of establishments increased scarcely at all during the decade from 1870 to 1880, or but 0.54 per cent., the number of employés increased 31.49 per cent., and the value of the product 57.79 per cent., and that while the number of establishments increased from 1880 to 1890 but 27.27 per cent., the number of employés